Tuesday

Oct 9, 2018 at 2:30 PMOct 9, 2018 at 8:45 PM

The VHS tapes are gone, but the familiar quirks remain at the Family Video store in Glenview: the army-green carpet; the rows of "must see movies"; the staff recommendations ("Mother!" — "This controversial film will leave you praising or boycotting me").

The Family Video chain, which is headquartered in the north suburb, is celebrating its 40th anniversary this month amid difficult times for the DVD rental industry. Family Video President Keith Hoogland admits that it's tough attracting customers in their 20s as video-on-demand and subscription streaming services grow in popularity, but he is optimistic about the future of his company because Family Video stores have become more than just places to rent movies.

"People were asking me as far back as 1985 and 1990, they'd say, 'Well, how long did you think the video business is going to go?' They were asking that question back then. The death of the video business was every two years. When DVDs came along, that was the death. When Beta went out, it was the death. When Blu-ray came along, it was the death," Hoogland said. "So I've always said I look out five years in our industry. And what I can tell you is five years from now, we'll still be in the video business."

The Hoogland family business didn't begin with videos. Keith's grandfather, Clarence Hoogland, founded Midstates Appliance and Supply Co. in 1946. The company distributed small appliances to mom-and-pop retailers. Clarence's son, Charlie, took over the business and became a distributor for Magnetic Video, which supplied videocassettes for Hollywood studios. Charlie saw an opportunity to rent his accumulation of unsold videotapes, and he opened a video movie club downstate in Springfield in 1978 that was a precursor to Family Video. Keith took over in 1994, and now there are some 700 stores in Canada and 18 U.S. states — mostly in the Midwest.

Family Video bills itself as the "largest movie and game rental chain in the United States" even as it has closed about 70 stores in the last five years. Hoogland said Family Video took over some of the leases once held by Blockbuster, which filed for bankruptcy in 2010, and Hollywood Video, which ceased operations the same year. Some of those converted stores didn't last because Family Video didn't own that real estate, which is an important part of Hoogland's business.

About 86 percent of the 15,300 video rental stores that were open nationwide in 2007 are now closed, the financial news site 24/7 Wall St. reported last year. Some independent brick-and-mortar stores still remain.

Family Video also faces competition from Netflix, which has operated a DVD-by-mail rental service for two decades, and Redbox, a company based in Oakbrook Terrace that facilitates DVD rental via automated kiosks.

Video-on-demand and subscription streaming services may present the toughest challenge for Family Video. Fifty-five percent of U.S. households subscribe to a paid streaming video service, up from 10 percent of households in 2009, according to Deloitte's 2018 Digital Media Trends Survey.

That's why Family Video locations have evolved from just videos and games — and the key is the real estate. In 2012, Family Video partnered with Marco's Pizza so customers can pick up a pizza when they grab their movies. Hoogland carved out space within the buildings that house Family Video stores for the pizza business. At the Glenview store, pizza can be ordered at a window between DVD displays. Hoogland said the move significantly reduced his overhead costs.

In a 2012 interview with the Chicago Tribune, Hoogland said he hoped to open more than 350 Marco's shops nationwide by 2019. Hoogland said his company owns 144 Marco's locations now.

"We had a lot of growing pains. We didn't have the team in place, the managers, district managers, regional, so we kind of put on the brakes. We just didn't feel like we're executing as well as we'd like to," Hoogland said. "We're doing well, we just slowed it down. We're taking a breath, we're just kind of letting everything shore up, getting our operationals and our systems all in place, and then we'll start opening 30 or 40 stores again in maybe another year or so."

Hoogland's Highland Ventures operates Family Video; franchised Marco's locations; Stay Fit 24, a chain of gyms; Highland Pure Water and Ice, 24-hour kiosks that sell purified water and ice; Legacy Commercial Property; and Total Wireless, a prepaid phone business that Hoogland aims to grow at Family Video stores. Family Video makes up 35 percent to 40 percent of Highland Ventures, Hoogland said.

While the Family Video customer base has been shrinking 3 percent to 10 percent at any given location, Hoogland said the stores have been attracting millennials who have children with their kids' promotions. He said longtime customers have remained loyal because of personalized customer service and the familial atmosphere. Hoogland is banking on nostalgia to help keep Family Video around for years to come.

"We might actually last long enough where grandparents are bringing kids in to show them what a video store is and rent movies, and get popcorn and candy. There's something to that. Think about records, for example. Vinyl's kind of back and doing well, and I can see video kind of doing the same thing," he said.

For now, Family Video is in the middle of 40 days of giveaways leading up to its anniversary party and 40-cent movie rental promotion on Oct. 21. Davin Loh, a 40-year-old freelance writer who lives in northwestern Indiana, said he hopes Family Video sticks around much longer. He said he visits the store in Highland, Ind., about twice a month because he spots movies there that he can't find anywhere else, such as "Sharkansas Women's Prison Massacre." He also rents games there.

"There's something about having a hard copy (of a game) and just being able to try it for one, two or five nights, then deciding whether or not you want to buy it later," Loh said.

"I think the window on video rental places is starting to close slightly, but I'm glad for what (Family Video) is, for what it's here for and whatever form it is right now currently. I'm definitely a fan."

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